Grocon link: union threat to boycott super fund

Victorian Premier Ted Baillieu ... “When it comes to superannuation, to have them [the fund] threatened in this way is something that would concern all Australians”. Photo: Luis Ascui

Sally Patten and Lucille Keen

KEY POINTS

Two construction unions have requested a meeting with Cbus super fund executives over ethics.

The CFMEU is in a bitter legal dispute with Grocon.

Cbus is thought to have invested in developments involving Grocon.

Victorian building unions have asked Cbus chairman Steve Bracks and chief executive David Atkin to front a meeting to explain the $18 billion superannuation fund’s links to builder Grocon.

The unions, including the Construction, Forestry, Mining and Energy Union and the Electrical Trades Union, are demanding that Mr Bracks and Mr Atkin set out the corporate governance and ethical policies that govern the scheme’s investments.

Cbus, through its $2 billion property arm as well as specialist managers, invests in large building developments, some of which have appointed Grocon, with which the CFMEU is in a bitter legal dispute.

Union members have threatened to withdraw their retirement savings from Cbus if the fund’s management fails to give adequate responses to questions about its ethical standards, although this would require changes to workplace arrangements.

BUSSQ a possible alternative

Brisbane-based BUSSQ, which has $2 billion of assets and also caters to employees in the building industry, has been mooted as a possible alternative to Cbus.

The request for Cbus’s top managers to attend a meeting comes after more than 2500 union members sent letters to the fund asking for details of its health and safety and corporate governance policies.

It is believed Mr Bracks, a former Victorian premier, and Mr Atkin have yet to respond to the invitation to address union members in person.

Mr Atkin indicated he was willing to discuss the fund’s position.

“Cbus sets the policy framework which requires our fund managers to assess environmental, social and governance risks and opportunities, including occupational health and safety, as part of every investment decision they make,” he said. “We have regular dialogue with our stakeholders, including unions on a whole range of issues, and our door is always open to those discussions.”

“That [suggestion] shouldn’t be the case and we are taking advice to see what actions we can do in response,” Mr Baillieu said.

Baillieu Very concerned

“We are very concerned about it. When it comes to superannuation, to have them [the fund] threatened in this way is something that would concern all Australians.”

Building watchdog chief Leigh Johns last month accused the CFMEU of having a “culture of coercion”, saying the Fair Work Building and Construction inspectorate was investigating more unlawful industrial action and coercion cases than in the past.

In August, the CFMEU blockaded projects worth billions of dollars, defying court orders to lift the blockades. Grocon subsequently launched legal action seeking $10.5 million in damages. The CFMEU and Grocon are expected to appear in the Victorian Supreme Court today over the matter.

The escalation of tension between Cbus and the building unions comes as CFMEU members and officials picket at the Little Creatures brewery development in Geelong.

Victoria Risks economic and reputational damage

“Victoria cannot afford the economic and reputational damage which results from the sort of thuggish-type behaviour that is allegedly occurring at the Little Creatures brewery site,” Mr Stone said.

On Monday it was revealed the Construction, Forestry, Mining and Energy Union had threatened to pull its members from the super fund because Cbus had invested in projects which were linked to the construction company.

Mr Baillieu said the union’s suggestion that its members leave Cbus unless the fund changed its investments was “clearly outrageous”.

Mr Baillieu said he had not spoken to Cbus chairman and former Victorian premier Steve Bracks about the matter.

Sources have told The Australian Financial Review the Cbus board would put its members’ interests above the union’s demands.

Board member and Australian Workers’ Union Victorian state secretary Cesar Melhem declined to comment, while Australian Council of Trade Unions president Ged Kearney, who also sits on the board, refused to take calls from The Australian Financial Review.

The CFMEU refused to comment on the matter.

Mr Baillieu said the state government would continue to look into what capacity the government had to prevent the CFMEU from making threats.